What to consider when providers talk about alliances and partnerships

We discussed earlier this week the new alliances formed by CombineNet in order to develop and extend the range of capabilities they can offer to clients. The links are with Upside Software on the contract management side, and Spend Radar on spend analytics. Now in this case, CombineNet appear to have built the technology from these partners into their own product suite, which should ensure solid integration. And I’m assuming that CombineNet clients will be working with and through their normal CombineNet sales channels to access their new products – so it should all be straightforward from a customer perspective.

But it got me think about issues that customers do need to consider when supplies start promoting alliances, joint ventures and similar. (This applies beyond purely the software world, we should stress). What should the customer look out for? The benefits are clear - and will of course be promoted by the firms. Wider capability, the chance to pick and choose what you need, and sharing of costs between partners, which can lead to better value for clients. But there are a few points to be aware of - here are three of the most important:

- If the alliance is offering products or services that originate from different firms within the alliance, do they actually integrate? Are they easy to use together, or will it feel like separate technologies, products, or services from separate firms? If it does, then are you really getting any benefit?

- Does the alliance actually make your life easier, for example in terms of a single point of contact, consolidated billing or account management, or will it still feel like dealing with separate firms? Who do you call when there’s a problem? Or is the driver cost-cutting, so a “sharing of resources” really means there’s less being invested in customer care?

- Have the partners worked out their own business model in terms of costs and revenues? Is that all clear and agreed up front? That may not seem important to you as the client, but I guarantee, if they’re going to end up squabbling amongst themselves about revenue or cost sharing, finder’s fees and so on, then it will rebound on you in some way!

So we’d suggest you test this when you are presented with the idea of alliances and partnerships. They can work very well for everyone, including the client, but it’s worth checking out a few of these key questions before you get too far.

First Voice

Very well stated, Peter: developing partnerships that benefit the customer, rather than just provide a corporate marketing benefit for the partners involved, is the key here, and a focus for what we’ve done with Spend Radar and Upside Software. We’ve worked with Spend Radar and Upside Software to define and deliver CombineNet solutions based on their underlying technology, but the user experience is entirely within the CombineNet universe, meaning that customers benefit from the focus of CombineNet’s account management, training and support organizations on their success. We see the integration points between the products as particularly beneficial as well. Thanks for raising such an important point as it relates to industry partnerships.

Associate Sponsors

Procurement Research

Spend Matters research is based on a year-long editorial calendar, exploring bigger picture areas and issues.

New! Everything You Always Wanted To Know About Your Spend Data (But Were Afraid To Ask)In this briefing paper we take a look at how spend analytics, and smart and creative use of the source data, can help organisations answer some of those tricky, complex, or even embarrassing questions relating to procurement expenditure. We look at questions such as: How do I get to the bottom of tail spend? and How much corruption really goes on my organisation?

New! Geo-political Risk - An Informed Global View Is Essential The fifth of our short papers outlining key supply chain risk areas looks at geo-political risks, which include war and revolution as well as labour disputes and the like. Clearly, this sort of risk event can be amongst the most serious in terms of implications for buyers.

New! "Man-Made" Risk - Different Risks Require Thoughtful StrategiesThis is the fourth of our short papers outlining key supply chain risk areas. This examines "man-made" risks, a broad category that ranges from fires and explosions to strikes and labour disputes. All can have a serious impact for customers of the firms affected, so effective risk management is vital.

New! Natural Disasters – How to Mitigate Unavoidable RisksThis is the third in a series of short papers outlining the supply chain risks that can have the most devastating effects on your business. This paper examines the risk to suppliers (and ultimately the buyer) of a natural disaster - a risk type that is mostly unavoidable but one against which you can mitigate.

New! Supply Chain Risk – Getting To Grips With n-Tier VisibilityIn this briefing paper, we look at supply chain risk, and in particular the risks that emerge from beyond the first-tier (the direct suppliers to our organisation). We include ideas on how to gain greater visibility of the whole supply chain or network, and what to do once we have it.

New! The Merger – A Procurement StoryA short novel in four chapters. It follows and scripts the daily lives of two CPOs whose businesses have been recently merged: the one, a fully tech-savvy, source-to-pay function, the other, relying on personal expertise and hands-on manual processes. We learn of their opposing challenges and how they resolve them -- together.

Improve Your Procurement Negotiation SkillsThe work of behavioural psychologist and Nobel Prize winner Dr Daniel Kahneman suggests some winning techniques. How to use priming, attitudes to risk and anchoring to your advantage in negotiations!

Full Value Buying: Moving Beyond Price NegotiationWe look at range of procurement mechanisms that can drive better value, and then consider two aspects in more detail - demand management and specification - which can drive far greater benefits than a pure price focus!